Education Loan
An education loan is a loan that students apply to meet the financial requirements to complete their course.
Domestic Education Loan
Students who would like to pursue education in India can apply for this loan type. The loan will get approved only if the applicant is admitted to an Indian educational institution and meets all other lender criteria.
Overseas Education Loan
Such loans help students realise their dream of pursuing the course of their desire in a foreign institution. The loan covers the airfare, accommodation, and tuition fee for students who wish to study abroad only if they satisfy the eligibility criteria.
Benefits of Education Loan
- The loan amount can go up to Rs.1 crore for international students and up to Rs.50 lakh for domestic students.
- 100% financing available for certain conditions.
- The financing covers other expenses, such as student exchange travel expenses and laptop.
- Parents should be joint borrowers for the education loan.
- Loan repayment tenure can go up to 15 years.
- Loan moratorium period of up to 6-months to 1 year from completing the course.
- Tax benefits up to 8 years on the loan interest payment.
- Age Eligibility:Â There is no specific restriction regarding the age of a student in order to be eligible for an education loan.
Financial benefits:Â Opting for an education loan reduces the strain on your family savings and eliminates the need to liquidate your investments in fixed deposits, mutual funds or bonds.
Pay after education: EMIs are payable only after students complete their study programme, so you don’t need to worry about repaying immediately.
Wide range of expenses covered: Study abroad loans cover not just tuition, but also living and travel expenses, study material, a student laptop and much more. Hence these non-fee expenses won’t create an additional financial burden.
Eligibility for Education Loan
- Age of joint applicant / co-borrower / guarantor should be minimum 21 years at the time of loan origination and maximum age at the time of loan maturity can be 70 years.
- Student Eligibility: The student should be an Indian National. The student shall have secured the admission in India or abroad through an entrance test or through merit based selection process
Eligible Courses:Â
- India:
- Post-Graduation Courses: Masters and Ph.D. from accredited institutions.
- Professional Courses: Engineering, Medical, Agriculture, Veterinary, Law, Dental, Management and Computer Sciences.
- Other professional courses such as CA, ICWA, CS, and CFA.
- Masters and Diploma Management Programs.
- Other courses leading to degree/diploma conducted by colleges/universities approved by UGC / Govt. / AICTE / AIBMS / ICMR, etc.
- Regular Degree/Diploma course like aeronautical, pilot training, shipping, nursing or any other discipline approved by Directory General of Civil Aviation / Shipping / Indian Nursing Council or any other regulatory body as the case may be, if the course is pursued in India.
- Any other course as shall be declared from time-to-time.
- Studies Abroad:
- Graduation: Reputed universities.
- Post-graduation: MCA, MBA, MS and other courses as shall be declared from time-to-time.
- Other courses such as CIMA – London, CPA in USA, CFA, CISA, and other approved courses as shall be declared.
- Degree/Diploma course like aeronautical, pilot training, shipping, etc. provided these are recognised by competent regulatory bodies abroad for the purpose of employment in India/abroad.
- The applicant must be a resident of India.
- He/she must have confirmed admission to a recognised educational institution, either in India or overseas.
- The educational institution must be affiliated with the University Grants Commission (UGC,) the All India Council for Technical Education (AICTE,) or the government.
- The applicant must be within 18 to 35 years of age at the time of loan application.
- The application must be opting for a graduate or a postgraduate degree, or a postgraduate diploma.
- The applicant who is pursuing a full-time course should have a co-applicant who is either a parent or a guardian, or in the case of married candidates – their spouse or a parent-in-law. This co-applicant must have a steady source of income.
- To improve the chances of loan disbursal, the student must be good at academics.
EMI Calculator for Education Loan
Education loans are intended to cover the cost of tuition, books and supplies, and living expenses while the borrower is in the process of pursuing a degree. Payments are often deferred while students are in college and, depending on the lender, for an additional six-month period after earning a degree. This deferment period is also referred to as a “grace period.”
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Calculate Your Education Loan EMI Online
An Education Loan EMI Calculator is a digital tool that simplifies the complex task of calculating EMIs. It considers the loan amount, interest rate, and tenure to provide you with your monthly EMI amount. This tool eliminates the need for manual calculations, reducing the chances of errors.
The formula to calculate EMI for a Education Loan is:
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
- P represents the principal loan amount
- R represents the monthly interest rate, calculated by dividing the annual rate by 12 and converting it to a decimal.
- N denotes the loan tenure measured in months.
Calculate Your Education Loan EMI Online
An Education Loan EMI Calculator is a digital tool that simplifies the complex task of calculating EMIs. It considers the loan amount, interest rate, and tenure to provide you with your monthly EMI amount. This tool eliminates the need for manual calculations, reducing the chances of errors.
The formula to calculate EMI for a Education Loan is:
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
- P represents the principal loan amount
- R represents the monthly interest rate, calculated by dividing the annual rate by 12 and converting it to a decimal.
- N denotes the loan tenure measured in months.
Documents required for Education Loan
For Indian studies loan:
- Two passport-size photographs
- A copy of the latest education certificate, copy of the 10th or 12th examination mark sheet
- A statement of course expenses
- Copy of the Aadhaar card and the PAN card of the student and the co-applicant
- Results of the entrance exam that was taken for admission, like GMAT, GRE, TOEFL, or IELTS
- A valid offer letter or admission letter from the educational institution
- Loan account statement for the last year if a loan from a bank or lender is still due
For students interested in a loan to study abroad:
- Duly filled application form.
- Two passport size photographs.
- ID, residence and age proof.
- A copy of statement of marks or certificates of last examination passed.
- Proof of admission to the university and the course
- Schedule of course expenses
- If you have received a scholarship, a copy of the scholarship letter is needed.
- Copy of Foreign Exchange permit if you have it.
- Bank account statement for last six months of the borrower, parents or guardian.
- Last two years’ Income Tax assessment of the borrower, parents or guardian.
- For loans with collateral, the details of security offered must be furnished. You might also be required to provide an advocate’s search and report about its marketability, mortgage ability, etc.
An applicant must be Indian. If the candidate is under the age of 18, their parents must apply for the education loan on their behalf. Furthermore, the applicant should be admitted to a reputable university or institution.
Yes, the educational loan interest rate can be changed from a fixed rate to a floating rate.
If you are a salaried co applicant, you need to submit the documents like salary slips, PAN card, Aadhar card, driving license, utility bills, and two passport size photos.Â
The minimum income to apply for an education loan is Rs.30,000 per month. However, some lenders do consider in approving education loans to the applicants who earn less than Rs.30,000 per month
The documents that are required for the self-employed professionals to apply for an education loan are business address proof, identity proof, TDS certificate, previous six months bank account statement, and qualification certificate.Â
Once the applicant gets job after the completion of the course, the lender will deduct the EMIs every month from their salary accounts.